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Apple Expressing Frustration as Tax Incentives for Austin Expansion Remain in Limbo
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That's not what he said. Let them set the tax rates but require that those be equal for all companies.
Texas has no state income tax. We do, however, have high property tax to make up for it. I'm in Travis county, in a 650 square foot condo, homesteaded, that the county values at a little over $75k, and paid over $1500 in property tax last year. Sales tax in Austin is 8.25% (state at 6.25%, city adding another 2% on top of that).
Maybe it's time we require that CEO of the company lived where the company does its business.
No, not enough people, regardless of the hourly wages.
Read this and you may understand:
http://http://www.appleinsider.com/articles/12/01/22/apples_overseas_manufacturing_operations_offer_much_needed_flexibility_not_just_savings.html
I agree...and am not just singling out Apple. I am also not a guru on tax incentives...however, non-small companies, in general, get very favorable incentives to open/expand offices. Yes, it's part of the way business is done in America...but I feel that our gov't hands out too many freebies a high percentage of the time. The taxpayers are left holding the bag. If the economy slows or the company goes out of business, etc. then "the deal" doesn't favor anyone except the company.
With Apple being on top of the world right now, I would tell Apple to stop being so nitpicky and man up and get the shorter end of the stick on a few of these deals. Apple's not going to pay billions in taxes on deals like this...it seems to be they want to pay $5 million instead of say, $10. Just agree to the $10 deal, consider all the OTHER EXTREMELY FAVORABLE ones Apple has gained in the past, and as a whole everything still probably favors Apple greatly.
How often does Apple open offices? twice a decade? Seriously. Retail stores are a different story.
What's in it for Austin?
I don't get it.
Honest question:
Why would Austin care if Apple "threatens" to leave? What does the city have to lose if Apple locates elsewhere?
Apparently it's not revenue. Then what?
I don't get it.
Honest question:
Why would Austin care if Apple "threatens" to leave? What does the city have to lose if Apple locates elsewhere?
Apparently it's not revenue. Then what?
Not really. If Apple opened up an office in Town X, Town X is not going to make a penny of Fred who lives in Town Y and drives to Town X everyday (other than getting gasoline or buying lunch or some kind of local purchases inside Town X).
If Apple hired 3200 new employees in the state (which work now in Town X), sure, the state now has THE POTENTIAL of 3200 people NOW OFF UNEMPLOYMENT which is nice. But unless Apple promises to hire all 3200 people who are currently unemployed, the state is simply going to get higher/lower tax revenue from the employee. If the employee currently makes $100k and goes to Apple to earn $110k, it's $10k more that the state can tax. Big whoop.
It drives me nuts when companies state "we're creating 1500 new jobs!" when they may in fact me creating "1500 new jobs as our employees instead of the competitor's employees". It also sickens me to see companies promote "we're going to create 50 jobs"...that's really something to impress us or the state? 300+ million Americans and you're going to create 50 new jobs in Utah...wow...lets have a parade.
It can be worse than that. Sometimes these can just be old jobs relocated from another state. In the case of Apple, they may indeed be new jobs, but those jobs would have appeared somewhere else, probably in the USA, if the state hadn't bribed them.
There are at least 49 other states that would bend over backwards to get a solid, stable, & growing tech company to open an operation on their turf, and a hundred million people in all of them for whom such a job would be a significant improvement.
Why anyone would choose Texas over any of the others is a mystery.
Why anyone would choose Texas over any of the others is a mystery.
Haha, keep telling yourself that. If they paid $25/HR people would trample eachother for the job in the us and pay to have the appropriate training beforehand.
you can never say...regardless of the hourly wages.
Tax breaks aren't just for big boys...
...we little guys get them too. I was able to deduct the full price of my new iMac, iPad, and printer along with a portion of my iPhone, iPad, and home data charges because I have a (very) small business that has me using those devices.
It's simple. Whether we like it or not, money talks and it drives 99.999% of decisions made in this country (and most others). Not just "big business" decisions. Every decision.
Should I send my kid to this school or that one?
Should I buy that car or this one? Or no car?
Should I buy a house in this state or that? Which city?
Should I get my hair cut at Fantastic Sam's or Chez Hair?
Should I buy Guiness or Milwaukee's Best?
But I digress.
The point I wanted to make is that I find it interesting that people state, almost as fact, that the government is handing out "too many" incentives. It's just how things work. One organization (Austin) incentivizing -- yes... with MONEY, how shameful! -- another organization to do something that the first organizations perceives to be "good for it." It's for them to decide how much is right. When the two organizations converge on an agreement, the deal is done.
Pretty simple, it seems to me. No?
...we little guys get them too. I was able to deduct the full price of my new iMac, iPad, and printer along with a portion of my iPhone, iPad, and home data charges because I have a (very) small business that has me using those devices.
It's simple. Whether we like it or not, money talks and it drives 99.999% of decisions made in this country (and most others). Not just "big business" decisions. Every decision.
Should I send my kid to this school or that one?
Should I buy that car or this one? Or no car?
Should I buy a house in this state or that? Which city?
Should I get my hair cut at Fantastic Sam's or Chez Hair?
Should I buy Guiness or Milwaukee's Best?
But I digress.
The point I wanted to make is that I find it interesting that people state, almost as fact, that the government is handing out "too many" incentives. It's just how things work. One organization (Austin) incentivizing -- yes... with MONEY, how shameful! -- another organization to do something that the first organizations perceives to be "good for it." It's for them to decide how much is right. When the two organizations converge on an agreement, the deal is done.
Pretty simple, it seems to me. No?
I get what you're saying, I really do. I just don't understand why it is wrong for a company to shop around for their next development and try to get the best deal. To me it's no different than when someone looks for the best mortgage.
They "sort of" do via the 3,600 new workers paying taxes year over year. That's the "line" anyway. The truth is much more painful... for the fine citizens of Austin.
I guess you've missed the point of those tax breaks completely.
It's not Apple demanding tax breaks, it's cities offering them in the hope to reel in certain companies.
We have MOOG in our community - western New York.
Any to the person, everyone I've ever talked to is happy that Moog is in town because we know they pay their fair share in taxes, and that helps DIRECTLY to make our community the great place it is.
pay your taxes big companies - the rest of us do.
Any to the person, everyone I've ever talked to is happy that Moog is in town because we know they pay their fair share in taxes, and that helps DIRECTLY to make our community the great place it is.
pay your taxes big companies - the rest of us do.
The MOOG in "The company asked for a 10-year payment-in-lieu-of-taxes arrangement, plus a sales-tax exemption and a mortgage recording tax break." or is that a different one?
http://www.statesman.com/business/official-apple-deal-in-peril-over-delays-in-2327590.html
This is the link to the article posted last night. See if this makes any sense to anyone.
This is the link to the article posted last night. See if this makes any sense to anyone.
I get what you are saying about a city potentially not benefitting when people commute from outside the city.
I do have an honest question though - if an employee leaves their current company to go work for Apple, doesn't the now vacancy of their job mean another person is hired in their place? That is, after they have moved to Apple, won't their former job be filled by someone else? The net effect, it would seem, is still increasing jobs. This would mean a fair bit of increased revenue to the state, even if it is bit by bit.
actually no - that article is about three different companies - the headline is MOOG - and a blurb about them.
Then, the second paragraph is about a small tee-shirt shop looking for the tax break
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I don't get it.
Honest question:
Why would Austin care if Apple "threatens" to leave? What does the city have to lose if Apple locates elsewhere?
Apparently it's not revenue. Then what?
A fair question. Because it would make the decision-makers look bad if those jobs went to another state. Revenue really isn't at stake here, if only because they are more-or-less guaranteeing that the project will be revenue negative for the next ten years. What is typically at stake is the appearance of promoting economic development. So it has more to do with politics than economics, and even less to do with good government.
FWIW, I worked as a city planner in local government for many years. One of the reasons I changed careers is I got tired of this kind of wheeler-dealer attitude that treated property owners differently based on who they were instead what they were doing. Especially in this state (not Texas) the property tax revenue burden has shifted steadily away from the commercial/industrial rolls towards the residential rolls. This happened for a variety of reasons, but one of them is the red carpet treatment that some companies get in the form of tax give-backs. This can't help but to shaft everyone else, and it does. Somebody has to pay for services and if it isn't going to be the favored corporations, it's going to be us.
It's an incentive to bring companies into a particular region to stimulate growth. For the most part, these aren't cases of companies demanding tax breaks, because they don't want to pay.
I seriously doubt Apple worries about whether it gets tax breaks or not, like you mentioned they make money hand over fist. But the ability to progress and get started building the extension is being held up by bureaucracy and that's what is frustrating.